Some Things You Should Know About Foreclosing On A New House

If you're ready to buy a house, it can be very exciting. Many people do whatever they can to become homeowners as soon as possible. In the majority of cases this is a good idea, but in other cases the person makes some unfortunate choices that can end up hurting them in the long run. Here are some things you should know about buying a house.

Why Do Some People Foreclose So Early On In Buying A House?

It is understandable why some people foreclose on their house years into owning it. Perhaps they could easily afford it when they bought it, but then they lost a job, or their circumstances changed and then the house was too much for them and they weren't able to afford the payments anymore. The real concern is people who get into a house right away without being able to afford it from the get go. You might ask yourself how this happens. Every person has an individual budget. The bank or mortgage lenders only see what is on paper.

So you can show them you make a good income and they will allow you to borrow up to a certain amount of your income. That means you might get approved for a more expensive house than you thought you could. Just because you can get approved doesn't mean that you should buy a house that big. You know your budget and you know how much you want to pay each month in home payments. If you have other loans that you need to pay, expenses for children and family members, or you know that money needs to go elsewhere, then only buy a house that you can easily afford.

Additionally, some people fail to take into account how much it takes to keep up a house. So assume that you have $1300 a month to put toward your house. Don't get a mortgage at $1299 if you can afford $1300 for the entire house. This is because you have taxes, insurance, utility payments and so much more than goes into home ownership. Get a mortgage for less that you can afford so that the excess goes towards taking care of the house.

What Happens If You Foreclose?

If you foreclose on a house you may have to file bankruptcy, it can ruin your ability to get loans or buy a house in the near future, and put a serious stain on your financial record. It can be fixed, but it takes time and is stressful. That is why it is best to avoid if at all possible.

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3 October 2017

About Me

Although I've never worked professionally in the real estate business, I sure know my way around it. How, do you ask? Well, I have simply rented a lot of different places and worked with a lot of different landlords and real estate agents. In the past 7 years I've lived in 11 different houses or apartments, none of them my own. In finding those 11, I have looked at literally hundreds of apartments. I used to hate house hunting, but now it's kind of fun. You just need to know what you want and the right questions to ask. Hopefully this blog can help you learn some of the tricks of the trade from another renter like yourself.